South Korea's Naver Has A Plan

Although artificial intelligence chatbots like ChatGPT pose a threat to the search ad market, Naver, South Korea's internet giant, views the rise of AI as an opportunity for the company. According to Statista, Naver is the most used search engine in South Korea, with a 61% market share of monthly active users, while Google has a 28% market share in the country.

  • AI-powered chatbots like ChatGPT pose a threat to search engines as they can provide direct answers to users' questions, rather than presenting a list of webpages for users to browse through to find answers
  • If fewer people use search engines, it would lead to a decline in search ad revenue, which is often the largest revenue stream for their operators. In 2022, Google generated over 57% of its revenue, or $162 billion, from Google searches alone

However, unlike Google, which primarily operates a search engine, Naver has other business units such as its content platform Naver Webtoon, multimedia mobile application Snow, fintech arm Naver Pay, and e-commerce platform Naver Shopping. Therefore, Naver views the rise of AI as an opportunity to expand its business and incorporate AI into its existing services, instead of solely relying on search ad revenue.

Google Is Under Pressure

According to a former Google executive, Sridhar Ramaswamy, ChatGPT, the AI chatbot developed by OpenAI, could potentially disrupt Google's ad business. Ramaswamy, who led Google's ad team from 2013 to 2018, believes that ChatGPT's conversational, human-like approach to providing answers to users' queries could prevent users from clicking on links that contain ads.

  • In March 2023, ChatGPT surpassed 1 billion monthly website visits, while also amassing an impressive user base of over 100 million individuals
  • Its streamlined approach to the search process makes it a more attractive option to users than Google's search engine, which displays a list of relevant links
  • ChatGPT synthesizes information from millions of websites to provide a single, concise answer to users' queries, making it a better experience
  • Despite ChatGPT's popularity, some users may find that the chatbot has errors

Here Comes Bard

Google has announced new features for its AI chatbot, Bard, including support for Japanese and Korean languages, easy text export to Google Docs and Gmail, visual search, and dark mode. The company has also removed the waitlist for Bard, making it available in English in 180 countries and territories. Google is also promising future features, such as AI image generation powered by Adobe and integration with third-party web services like Instacart and OpenTable. These upgrades are expected to improve the general answers and usability of Bard, which was released two months ago for select users in the US and UK.

  • Google has faced criticism due to Bard's factual errors and compared to rivals like OpenAI's ChatGPT and Microsoft's Bing chatbot
  • However, with the addition of new features and an upgrade to use its new PaLM 2 language model, Bard is expected to perform better
  • Google claims that the new version of Bard is excellent at handling coding queries, including debugging and explaining chunks of code in over 20 languages

Despite the recent upgrades, Google still emphasizes that Bard is an experiment and not a replacement for its search engine.

Disclaimer

Please note that this article does not constitute investment advice in any form. This article is not a research report and is not intended to serve as the basis for any investment decision. All investments involve risk and the past performance of a security or financial product does not guarantee future returns. Investors have to conduct their own research before conducting any transaction. There is always the risk of losing parts or all of your money when you invest in securities or other financial products. Please note that the writer of this article is not registered as a financial advisor.

Credits

Photo by Daniel Bernard on Unsplash.